Health Care Coverage Options for Texas Children

(May 2006)

Health care coverage can assure your child’s access to medical care by helping pay for routine checkups and immunizations, prescription medicines, hospital stays, and other health services. Many parents are able to add their children as dependents to a group health plan offered through their work or some other association. For some parents, however, group coverage isn’t an option because it’s too expensive or their employer doesn’t offer a health plan.

If you are unable to insure your children through dependent group coverage, there are some alternatives. These include

• private health care coverage from an insurance company or health maintenance organization (HMO)
• Medicaid for Texas Children
• the Children’s Health Insurance Program
• the Texas Health Insurance Risk Pool

Private Health Care Coverage

Health care plans are usually described as either indemnity (fee-for-service) or managed care. The major differences between the two are related to your ability to choose providers, the costs you pay for covered services, and how your claims are paid. Following is a brief description of both types of plans.

Indemnity plans are issued by insurance companies. With an indemnity plan, you can use any doctor or hospital you want. In most cases, you pay the doctor or provider at the time you receive medical treatment. You or the provider then sends a claim form to the insurance company, which pays its share of the cost for covered services. Usually you must meet a deductible each year. A deductible is the amount you have to pay out of your own pocket before the insurance company will pay anything toward your health care. Deductibles vary by plan, so make sure you understand how much your deductible will be. If you have more than one child covered by the plan, you may have separate deductibles for each child. You’ll probably have to meet a deductible each year.

Once you meet the deductible, most indemnity plans pay a percentage of the “usual and customary” charge for covered services. The usual and customary charge is the amount the insurer has determined to be the reasonable and appropriate charge for a particular treatment or service. Most plans normally pay 80 percent of the usual and customary cost of a covered service and require you to pay 20 percent. Other plans may pay a different percentage. The amount you are required to pay is called coinsurance. If the provider charges more than the usual and customary charge, you will have to pay both the coinsurance and the remaining balance owed to the provider after the insurance company has paid its share of the claim.

Generally, the more you are willing to pay out of pocket, the lower your premiums will be.

Managed care plans use networks of selected doctors, hospitals, and other providers to provide comprehensive health services to plan members. You generally have less paperwork and lower out-of-pocket costs in a managed care plan, but your choice of doctors is usually restricted. There are two types of managed care plans in Texas, preferred provider organization (PPO) plans and health maintenance organizations (HMOs).

• PPO plans are issued by insurance companies. In a PPO plan, you can take your child to any doctor or provider you want – even if the doctor or provider isn’t in the PPO’s network – but your out-of-pocket costs will be lower if you use network providers. PPOs typically require you to pay a monthly premium, coinsurance, and a copayment each time you receive medical care.
• HMOs normally require you to use only providers in their network. You must select a primary care physician to oversee your child’s health care. The primary care physician coordinates your child’s care and acts as a “gatekeeper” to other providers. This means you must have a referral from the primary care physician if you want to take your child to a specialist or another doctor. Generally, an HMO will not pay for services provided outside its network, except in medical emergencies or in certain other situations. Therefore, if your child receives nonemergency medical care from a provider outside the HMO’s network, you will likely be responsible for paying the full amount of the bill. HMOs typically require you to pay a monthly premium and a copayment each time you go to the doctor or receive medical care.

For lists of HMOs and insurers writing individual health policies in Texas, call the Texas Department of Insurance (TDI) Consumer Help Line or visit the TDI website

1-800-252-3439
463-6515 in Austin
www.tdi.state.tx.us

TexCare

If you can’t afford an individual policy from a private insurance company, you may be able to obtain coverage through two programs offered by TexCare, the umbrella organization for Medicaid for Texas Children and the Children’s Health Insurance Program (CHIP). Both programs provide health coverage to eligible children through age 18.

Medicaid for Texas Children is a state and federal assistance program that provides health care for eligible low-income Texans. Medicaid for Texas Children is provided at no cost to children who qualify. The benefits are extensive and often better than those of employer-sponsored or individual health plans.

To qualify for Medicaid coverage, a child must be

• a Texas resident
• a U.S. citizen
• under age 19
• living in a family with financial resources, assets, and income that meet Medicaid’s requirements.

A family’s home and personal property are not included when determining assets, but all or part of the value of a vehicle may be included.

The Texas Health and Human Services Commission (HHSC) determines Medicaid eligibility for most children. Children in families receiving Temporary Assistance for Needy Families (TANF) automatically qualify. A family’s financial situation is usually reviewed every six months to determine if participating children are still eligible. For specific information about your family’s eligibility, call the HHSC office nearest you, or visit the HHSC website

www.hhs.state.tx.us

The Children’s Health Insurance Program (CHIP) is a federal and state health coverage program for families who earn too much money to qualify for Medicaid but can’t afford a private health plan. CHIP is offered by private insurance companies and HMOs and is available statewide.

CHIP benefits are comparable to most private health plans and are designed to meet the needs of children. Benefits include hospital care, surgery, X-rays, physical and speech therapy, prescription drugs, limited mental health services, emergency services, regular health checkups, and immunizations.

Participating families usually pay a fee, which covers all of the family’s children in the plan. The fee is based on income and can range from $0 to $50 every six months. Most families also have copayments for doctor visits, prescription drugs, and emergency care.

Families who receive CHIP coverage must re-enroll every six months. You can maintain CHIP coverage until the next renewal term, even if your financial situation improves during the period.

To qualify for CHIP, a child must be

• a Texas resident
• under age 19
• a U.S. citizen or legal permanent resident (a parents’ citizenship or immigration status does not affect a child’s eligibility, and is not reported on the application form)
• uninsured for at least 90 days, with some exceptions, such as when a parent’s marital status changes, or certain cases when a parent loses coverage as a result of job loss
• living in a family that meets CHIP income requirements (there are some stipulations based on the child’s age, but family income can never be more than twice the federal poverty level).

For more information or to apply for CHIP, call TexCare or visit its website. You use the same application to apply for both Medicaid for Texas Children and CHIP.

1-800-647-6558
www.texcarepartnership.com

Texas Health Insurance Risk Pool

Parents also may be able to cover their children through the Texas Health Insurance Risk Pool (Health Pool). Coverage through the Health Pool can be expensive – premiums can be as much as twice the rate charged in the standard market. The Health Pool is primarily intended for Texans who are unable to obtain insurance from licensed private insurers because of their health condition. You may also be eligible for coverage through the Health Pool if you have been offered coverage by a private insurance company, but at a cost higher than the Health Pool’s current premium rate, or if you have been offered a policy that excludes coverage for a particular medical condition.

Health Pool coverage is similar to that offered by employer-sponsored or private insurance plans. Benefits cover hospital stays, physician services, and prescription drugs. The Health Pool also provides coverage for serious mental illness, subject to calendar year maximums for inpatient and outpatient treatment. The Health Pool does not cover treatment for chemical dependency or drug abuse.

To be eligible for Health Pool coverage, a child must be one of the following:

• rejected for substantially similar individual coverage for health reasons
• unable to find substantially similar individual coverage, except at rates higher than those charged by the Health Pool
• a dependent of an adult covered by the Health Pool
• certified by an agent as unable because of a medical condition to obtain substantially similar coverage from a licensed insurance company or HMO that the agent represents
• diagnosed with a medical condition that automatically qualifies a person for coverage from the Health Pool.

For more information, call the Health Pool or visit its website

1-888-398-3927
www.txhealthpool.com

Other Options

If your child is school age, contact your child’s school and ask whether there’s an insurance plan offered through the school. Some schools offer affordable health plans for their students. Schools may also be able to tell you about other alternatives for care. For instance, some schools may participate in partnerships with local health care providers to provide free or low-cost services, such as checkups and immunizations, to their students.

If none of these options work for you and your family, you and your children may be eligible for indigent health care. For information on indigent care options in your county, contact your county courthouse.

For More Information or Assistance

For answers to general insurance questions or for information on filing an insurance-related complaint, visit our website or call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday

www.tdi.state.tx.us
1-800-252-3439
463-6515 in Austin

For printed copies of consumer publications, call the 24-hour Publications Order Line

1-800-599-SHOP (7467)
305-7211 in Austin

Help us prevent insurance fraud To report suspected fraud, call our toll-free Fraud Hot Line

1-888-327-8818

To report suspected arson or suspicious activity involving fires, call the State Fire Marshal’s 24-hour Arson Hot Line

1-877-4FIRE45 (434-7345)

The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.

For more information contact: ConsumerProtection@tdi.state.tx.us